In California, there exists insurance coverage for damages from wildfire. This is owing to the fact that for a long time, wildfire in California has become more frequent. And even more severe. These fire incidents which most times emanate from heavy forest areas times escalate to residential communities and cause serious economic, health, property damages . For instance, the 2018 camp fire incident in the California resulted in 85 deaths as well as the destruction of about 19000 properties in the paradise town in California. Therefore California Wildfire Insurance policy is important as a step for recovering from damages as a result of wildfires.
California wildfire and the risks associated with it has created a lot of challenges for the insurance markets. And to increase in payable premiums, deductibles etc. These obvious increase has led to decrease in coverage subscription. The increase has equally led to total cancellation of insurance Policies. However most times when the intending policyholders are unable to buy standard insurance policies from the private insurance markets, they rely on the State’s Fair Access to Insurance Requirements (FAIR) Plan. The FAIR is a pool of all insurers with license to operate in the State.
WAYS TO OBTAIN CALIFORNIA WILDFIRE INSURANCE
There are basically three ways to obtain wildfire insurance in California and they include;
- Through the Admitted Market
- The Excess or Surplus Line Market and
- Through the State’s Fair Access to Insurance Requirements (FAIR) Plan Policy
THE ADMITTED MARKET
The ‘’Admitted’’ market is the market provided by the State’s Department of Insurance and Insurers that follow the Rules and Regulations of the State’s Department of Insurance. When the policyholders file claims with their insurers and they fail to pay, the claims will be settled by the state’s guaranty funds if the insurers fail to pay. Moreover, where and whenever an insured believes his claims has not been properly handled, he has the choice of appealing the decision to the State’s Department of Insurance.
THE EXCESS OR SURPLUS LINE MARKET
The Excess or Surplus Line Market is made of insurance companies who are not regulated by the state like in the admitted market and this tends to make policies purchased from them to be more expensive. And because of this obvious reason of expensiveness, it is more less preferred and subscribed prospective policyholders and as such constitutes a little percentage of the summation of wildfire insurance policies in California.
THE STATE’S FAIR ACCESS TO INSURANCE REQUIREMENTS (FAIR) PLAN POLICY
The FAIR policy plan is that which is made compulsory by the State and as well as backed by the Insurers from the Admitted Market as well as the Excess or Surplus Line Market and indeed all Insurers in California. However, this policy is far more expensive than the other policies from the other markets. This is because the properties covered by their policies are high risk properties.
WHAT WILDFIRE INSURANCE IN CALIFORNIA COVERS
There are certain protections that comes with buying a wildfire insurance coverage in California. However, the coverage will greatly depend on the terms of the policy or agreement between the insurer and the policyholder. Some of the coverage include;
- Coverage to your dwelling house
- The additional coverage for other structures
- Additional living expenses coverage
- Coverage for personal properties
COVERAGE FOR DWELLING HOUSE
This is the type of coverage offered by California wildfire insurance coverage that pays for the expenses incurred in replacing or in rebuilding of insured physical structure or building in your home and other structures which are attached to it and are damaged in the event of wildfire incident.
THE ADDITIONAL COVERAGE FOR OTHER STRUCTURES
There may be structures in your home which is not attached to the main structure, this additional coverage for unattached structures will make provision for financial support to replace or rebuilt such unattached structures hit or damaged by wildfires. This class of coverage is important because the dwelling house policy coverage does not extent to unattached structures.
ADDITIONAL LIVING EXPENSES COVERAGE
When incidents of wildfire damage your homes, you become incapable of living in them as you need to stay or live somewhere else while it is being repaired. This is the reason why you need this type of insurance coverage to cater for the cost of expenses incurred from hotel accommodations, feeding and other associated expenses incurable due to your inability to live in your home.
COVERAGE FOR PERSONAL PROPERTIES IN WILDFIRE INSURANCE IN CALIFORNIA
This is the coverage that pays for the replacement of your personal belongings damaged by wildfire. These may include clothings, electronic appliances, furniture and the likes. Therefore, it is very imperative to get accurate data of your personal effects so as to make sure you buy adequate coverage for them.
MAJOR CAUSE OF WILDFIRE INS CALIFORNIA
The majority of the causes of wildfire in California are man-made. These common causes include but not limited to equipment malfunction, arsons, burning of debris, reckless discard of cigarettes etc.
Apart from the above causes of wildfire causable by humans, there are others not due to human beings such as lightening strikes, etc.
CONCLUSION
In recent years, the incidents of wildfires have increased in frequency and seriousness of its happening in California. This is the reason why it is very imperative to have a wildfire insurance policy in California as a tool for managing the risks of wildfires as well as the tool of recovering from its attendant disasters and damages.
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